this is from gene arensberg's latest report. he thinks something may be up in the gold market:
Something is different this time. Here we are with gold over $1,200 the ounce, within one or two day’s volatility of a new all time high for the metal, and instead of an LCNS:TO near 60%, instead of an LCNS:TO which screams to us that the largest gold sellers are supremely confident in lower gold prices just ahead, the relative commercial net short positioning comes in this week almost 15 percentage points below that – with the open interest near an all time high.
We no longer associate an LCNS:TO of 45% as overtly bearish for gold and haven’t since 2007. That doesn’t mean that gold can’t fall from here, it certainly can and it might, but what this number is telling us is that some goodly portion of the short positioning on the COMEX is now held by other traders than the “ BS usual suspects.” Whereas before we might have thought in terms of the commercials as being pretty much the majority of the sell pressure on the COMEX, today, with this particular report, the signals are that the largest of the largest gold sellers are less than confident in lower gold prices – with the selling slack now being taken up by other market makers doing their own hedging.
Yes, we see this as a completely new development. One we have not seen since the first inkling of it in September of 2009.
Our antennae are up, we are on the sidelines with our short-term bullets and we are anxious. Anxious not because of our long-term physical holdings, those give us comfort. We are anxious because we sense something extraordinary is afoot, something potentially historic … and while we do not want to miss out on a potential major move, our instinct is to be cautious when our indicators perform in unusual ways.
http://treo.typepad.com/20100528COTflashPDF.pdf
